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LNGINDUSTRY | November / December 2014
November / December 2014
www.lngindustry.com
US Office: +1 (713) 820-­‐9603 UK Office: +44 (0)1621 840447 ISSN 1747-1826
CONTENTS
NOV/DEC 2014
03 Comment
05 LNG news
12 All around the world
59 Growth of an LNG mobile pipeline
Sean Murray, Worthington Industries, explains the concept of
the LNG ‘mobile pipeline’, details challenges and successes
experienced in its global applications and describes opportunities
for growth.
63 Flexible flaring
Naoki Shimoda, USA, and Girish Shirodkar, Asia Pacific, Strategic
Decisions Group, provide an overview of the global LNG industry.
A L L AROUN D
Naoki Shimoda, USA,
and Girish Shirodkar,
Asia Pacific, Strategic
Decisions Group,
provide an overview
of the global LNG
industry.
Converting flare gas to LNG is a viable option for oilfield
operators facing increasingly restrictive regulations. Charles Ely,
Dresser-Rand, USA, explains why.
12
67 Zeebrugge: the transforming terminal
THE WORLD
T
he ‘age of gas’ is now well and truly upon the global
energy markets. Fracking has sky-rocketed supply of
natural gas from shale and tight formations. Gas has
shifted from being a regional fuel to becoming a focal point of
global energy supply.
Natural gas has historically lagged behind oil as a fuel since
it requires end-to-end investment in pipelines or needs to be
cooled to cryogenic temperatures as LNG, for transportation to
the end customer. The striking growth in LNG trade over the last
five decades is evidence of linkages being forged between the
key regional gas hotspots and demand centres. This has also
been accompanied by increased spot trade and by greater
flexibility in the terms and conditions of long-term gas
contracts.
Dirk Nous, Fluxys, Belgium, examines how the Zeebrugge LNG
terminal has begun its transition from a regas terminal to a
fully-fledged LNG hub for northwest Europe.
Supply dynamics
The past couple of years have seen the emergence of a few
mega trends on the supply side.
Shale gas takes centre-stage in the US
Shale gas has transformed the US energy landscape. Reserves
in the US stood at 129.4 trillion ft3 in 2012, up from 34 trillion
ft3 in 2008.1 Between 2008 and 2011, US shale gas production
rose by over 55% each year to almost 8 trillion ft3 in 2011, and
its share of total US gas production jumped from 5% to 39%.
The US has become the top producer of oil and gas, which led
to a large drop in Henry Hub (HH)
prices, from US$ 13/million Btu in
2008, to US$ 1.9/million Btu in
April 2012 before recovering to
US$ 4/million Btu levels in
2013 and 2014.2
72 Tailor-made services
Raphaël Pujol, Stéphane Loubat and Pierre Bernoux, Elengy,
France, discuss LNG transshipment at the Montoir-de-Bretagne
LNG terminal.
77 A great stretch
12 LNGINDUSTRY
NOV/DEC 2014
NOV/DEC 2014
LNGINDUSTRY
Joel Fusy and Nicolas Duhamel, FMC Technologies, France,
take a look at loading system operations with reference to
Petronas’ FLNG 1 project.
13
20 Finding the right patch
Louise Ledgard, BMT Group Ltd, UK, highlights the importance
of understanding metocean conditions in order to determine the
feasibility of a potential FLNG site.
81 Evolving solutions for every application
Peter J. H. Carnell and Vince Atma Row, Johnson Matthey, UK,
posit that emerging technology allows greater flexibility for the
design and operation of FLNG units.
85 Under supervision
Richard Hepworth, Trelleborg, Dubai, discusses the development
of new and existing technologies for use in on and offshore LNG
applications.
27 A different approach
Simon Whibberley, European Automation Projects, UK,
looks at technologies for terminal automation systems.
31 FLNG hazard perception
36 The last line of defence
40 Choose carefully
Duncan Gaskin, Bestobell Marine, UK, discusses the importance
of choosing the right valve for offshore applications.
LNGINDUSTRY | November / December 2014
Jean-Paul Boyer, Pentair Valves & Controls, UK, looks at how
safety valves maximise the protection of essential infrastructure
in LNG applications.
43 Smooth operator
Hiroaki Nakamoto, Ebara International Corp., Cryodynamics
Division, USA, examines the effect of hydrostatic bearings on
cryogenic applications.
47 Job to protect
Paul Greigger, PPG Protective & Marine Coatings, examines
solutions for fire and cryogenic spill protection.
51 Below zero
55 The pressure’s on...
Simon Oury, Cryostar, France, looks at two different challenges
facing LNG stations.
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www.lngindustry.com
Edward Shanks, AkzoNobel, UK, discusses the challenges facing
passive fire protection systems in the growing Arctic and cold
climate LNG industries.
November / December 2014
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LNG Industry is audited by the Audit Bureau of Circulations (ABC).
An audit certificate is available on request from our sales department.
ON THIS MONTH’S COVER
Francesco Criminisi, Wim van Wijngaarden and Shyreen Dahoe,
SBM Offshore, the Netherlands, assess the safety benefits of
dual nitrogen cycles on converted FLNG units.
CALLUM O’REILLY EDITOR
COMMENT
O
ver the past month or so, Britain’s biggest
supermarket, Tesco, has been hitting the headlines
here in the UK for all the wrong reasons. The Serious
Fraud Office has opened a criminal investigation into
accounting irregularities at the retailer after it was revealed
that it had overstated its profits by £263 million.
The announcement was the latest in a long line of
embarrassments for the supermarket, which has lost 50% of
its market value within the past year alone.
Analysts have written endless blogs and reports
assessing where exactly it all went wrong for Tesco. But at
the heart of the problem is the simple fact that the company
failed to keep up with its competition. As Tesco focused its
efforts on international expansion (does ‘Fresh & Easy’ ring
a bell to any of our readers in the US?), it was accused of
taking its eye off the ball back home. The rise of discount
retailers since the recession – and changes to the shopping
habits of increasingly cost-conscious Brits – has left Tesco
playing catch-up.
Back in the LNG industry, the Canadian province of British
Columbia (B.C.) is also desperately trying to keep pace with
its rivals. In its latest move, B.C. confirmed last month that it
is slashing its proposed tax on LNG export projects.
As announced in February, the tax rate will start at 1.5%
of profits. However, it will now rise to just 3.5% after capital
costs have been recovered, rather than the original figure of
‘up to’ 7%.
The substantial reduction has been attributed to market
changes, such as declining LNG selling prices and increased
construction costs.
james.little@lngindustry.com
Editor
Callum O’Reilly
callum.oreilly@lngindustry.com
Advertisement Director
Rod Hardy
rod.hardy@lngindustry.com
Advertisement Manager
John Baughen
john.baughen@lngindustry.com
Production
Stephen North
stephen.north@lngindustry.com
Website Manager
Tom Fullerton
tom.fullerton@lngindustry.com
Website Editor
Callum O’Reilly
callum.oreilly@lngindustry.com
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katie.woodward@lngindustry.com
Circulation Manager
Victoria McConnell
victoria.mcconnell@lngindustry.com
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LNG Industry (ISSN No: 1747-1826, USPS No: 006-760) is published
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CONTACT INFORMATION
Managing Editor
James Little
Introducing Bill 6, the Liquefied Natural Gas Income
Tax Act, B.C.’s Minister of Finance, Michael de Jong, said:
“A comprehensive and competitive income tax applicable
to the LNG industry gives proponents the certainty they
need to make investment decisions while ensuring British
Columbians receive the revenues they deserve from this
new industry.”
Ultimately, the decision to cut the LNG income tax boils
down to increasing pressure from major industry players
such as Shell and Petronas, the latter of which threatened
to delay construction of its Pacific NorthWest LNG project
unless the proposed taxes were lowered.
Just as consumers now demand the best price for their
grocery goods, Asia’s biggest LNG buyers are shopping
around to ensure that they get a competitive price for their
gas. In turn, developers are insisting on better terms when
investing in LNG projects. B.C.’s Premier, Christy Clark, will
hope that these significant tax cuts are enough to encourage
developers to make final investment decisions on their
proposed projects in the province, propelling Canada into a
competitive position within the LNG marketplace.
Here at LNG Industry, we recognise that our readers
(and advertisers) are also looking for increased value. That
is why, in addition to launching our brand new app for Apple
and Android devices last month (more details on p. 65), we
are also pleased to announce that we will be publishing an
extra issue of the magazine in 2015. If you are interested
in providing a technical article or case study to one of our
10 issues next year (free of charge, of course), please drop
me a line: callum.oreilly@lngindustry.com
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LNGNEWS
Belgium
Australia
Antwerp Port Authority issues Request for Proposals
Santos GLNG completes first gas processing hub
T
S
he Antwerp Port Authority has issued an official Request
for Proposals with a view to appointing a candidate
to operate an LNG bunkering station, for which the Port
Authority will grant a five-year concession. During this time,
the operator will be responsible for providing LNG to barges
in Antwerp and for maintenance and promotion of the facility.
The Antwerp Port Authority is one of the partners in
the LNG Master Plan for the Rhine-Main-Danube aimed
at promoting LNG as a fuel and as a cargo for European
barges. As part of this European project, the Port Authority is
building a bunkering station for barges, partially subsidised
by the European Commission’s TEN-T programme. After the
European announcement of the selection of candidates earlier
this year, the specifications for construction of the station will
be given to the selected candidates this month.
It should be possible for barges in the port of Antwerp
to fuel up with LNG at a fixed station by 2016. The possibility
for truck-to-ship bunkering with LNG already exists, but
the construction of a bunkering station will make LNG
continuously available for barges. The exhaust gases from a
barge powered by LNG contain hardly any particulates, and
the emissions of NOx and SOx are also drastically reduced
compared to using diesel.
Interested parties have until 5 January 2015 to submit their
proposals to the Antwerp Port Authority.
antos GLNG has completed the first of its three major gas
processing hubs in its Queensland gas fields.
The hub is located in the Fairview field, north of Roma.
It is now fully operational, with commissioning progressing
well at Santos GLNG’s two other major processing hubs.
Completion of the hub follows the recent delivery of
first gas into the Santos GLNG pipeline and the completion
of hydrotesting of the second LNG storage tank on Curtis
Island.
Santos Vice President Queensland, Trevor Brown, said:
“This is a great story for Queensland. Santos GLNG alone
is projected to deliver ongoing investment in this state [...]
This means long-term jobs for Queenslanders over the next
20 - 30 years.”
Brown continued: “LNG is without doubt the new shining
light of the Australian economy. In just a few short years, LNG
will overtake coal and become Australia’s second-largest
export behind iron ore – that is a staggering statistic that
demonstrates the massive investment underway today.
“We’re making excellent progress at Santos GLNG.
First gas is scheduled to arrive at our plant on Curtis Island
later this year, we’re approaching 90% complete, we’re on
budget and on track to deliver first LNG in 2015.”
Santos GLNG is a joint venture between Santos,
Petronas, Total and Kogas to supply LNG to global markets.
India
GAIL (India) and SOCAR sign MoU to pursue LNG opportunities
G
AIL (India) Ltd has signed a Memorandum of
Understanding (MoU) with State Oil Company of
Republic of Azerbaijan (SOCAR).
As part of the MoU, the two companies will jointly
pursue LNG opportunities through capacity booking, LNG
procurement and promotion of LNG projects globally.
Both SOCAR and GAIL will also cooperate in
optimising LNG marketing, sourcing and shipping
requirements.
Furthermore, the two companies will pursue business
opportunities in upstream assets across the world and joint
investment in petrochemical projects.
Chairman and Managing Director of GAIL, B. C. Tripathi,
said: “We are happy to enter into this strategic relationship
with SOCAR. Skills and strengths of both the parties would
be leveraged to explore business opportunities jointly
in natural gas and LNG business including new business
developments across the gas value chain.”
NOV/DEC
2014
LNGINDUSTRY
5
LNGNEWS
USA
Canada
EIA report confirms the benefits of LNG
exports
B.C. cuts LNG tax in half
A
recent report from the US Energy Information
Administration (EIA) has confirmed previous
findings that higher levels of LNG exports would
generate greater economic gains for the US.
Commenting on the findings, API Vice President
for Regulatory and Economic Policy, Kyle Isakower,
stated: “The updated study confirms what past
research has found, which is that higher levels
of exports prompt more US growth and increase
investment in American energy security.
“Across the board, demand for exports was
met with higher domestic production, showing that
America has the resources to supply affordable
energy here at home, while lowering the trade deficit,
creating new jobs, and supporting our allies overseas.
“Even in a pessimistic scenario the EIA called
‘particularly implausible’, the economic gain for
America far outweighed a modest increase in natural
gas prices. In more likely scenarios, the potential
change in prices was marginal, with an impact on
electricity bills near zero. More importantly, America’s
economy will grow as exports grow, providing more
jobs and more income here at home.”
T
he government of British Columbia (B.C.) has cut its proposed
LNG tax from ‘up to’ 7% to 3.5%.
The province’s tax framework was reviewed in February 2014. At
this time, the LNG Income Tax rate was announced to be 7%, based
on 2013 economic assumptions and conditions.
The new, reduced rate of 3.5% is the result of changes to the
market since February. The combination of declining LNG selling
prices and increased construction costs has resulted in a lower rate
that is said to be more attractive to investors and more indicative of
current market conditions.
The LNG Income Tax applies to the net income from liquefaction
activities at LNG facilities in B.C. The tax rate on net income
will be 3.5%, effective for taxation years beginning on or after
1 January 2017. During the period when net operating losses and the
capital investment are being deducted, a tax rate of 1.5% will apply
and is creditable against the 3.5% tax.
In 2037, the LNG Income Tax rate will increase to 5%. This
ensures that proponents have time to build a strong foundation in
the communities in which they operate, before the full extent of the
tax is applied. It also ensures guaranteed revenue flow for the next
generation of British Columbians.
Currently, there are 18 potential LNG projects in B.C. that
have invested over CAN$ 7 billion to acquire natural gas assets
in the province. An additional CAN$ 2 billion has been invested in
preparation for construction of B.C. LNG infrastructure.
NEWS HIGHLIGHTS
XXEU to co-finance construction of LNG-fuelled ferry
XXBear Head LNG doubles initial production capacity
XXPSE and Totem Ocean pen LNG supply deal
To read more
about these
stories go to:
6 LNGINDUSTRY
NOV/DEC 2014
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All Rights Reserved.
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China, our integrated solutions in the LNG industry have never been more evident.
Contact CB&I to learn how our complete solutions can benefit your next LNG project.
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LNGNEWS
USA
Lithuania
BG Group orders Rolls-Royce gas turbines
Lithuania welcomes LNG storage vessel
B
L
G Group has selected Rolls-Royce Trent 60 DLE
industrial gas turbine packages to be used as the drivers
for the main refrigeration compressors at the Lake Charles
LNG export project in Louisiana, US.
BG Group and Rolls-Royce have also agreed the terms
of a Long Term Service Agreement covering the support and
maintenance of the equipment for up to 25 years, which will
help deliver high levels of availability for the plant.
Both the equipment and service contracts are expected
to commence in the first half of 2015, subject to the Lake
Charles LNG plant permitting process and final investment
decisions by BG Group and Energy Transfer, the project
developers.
Each of the three LNG trains will use four Trent 60 DLE
gas turbines as part of the Air Products C3MR refrigeration
process.
Each train will use two Trent 60 DLE gas turbines
driving propane compressors and two Trent 60 DLE gas
turbines driving mixed refrigerant compressors for a total
of 12 Trent 60 DLE gas turbines in the plant.
ithuania has welcomed the arrival of the LNG storage
vessel, the FSRU Independence, in Klaipeda.
The Klaipeda LNG terminal, described as a ‘guarantor
of energy and geopolitical security’, will ensure
self-sufficiency and security for Lithuania, enabling the
country to reduce its dependence on Russian gas.
The 170,000 m3 FSRU Independence, owned by
Höegh LNG, is the second of four FSRUs ordered from
Hyundai Heavy Industries, and will serve as Lithuania’s
first LNG import terminal under a long-term charter with
Klaipėdos Nafta.
Speaking at the ceremony, President of Lithuania,
Dalia Grybauskaitė, said: “In the twenty-fifth year of its
re-independence, Lithuania again stands proud of its
strong spirit, courage and political will. The liquefied
natural gas terminal is an important strategic project
and a great victory of our state. It is not only energy
independence, but also political freedom. From now on,
nobody will dictate us the price for gas or buy our political
will.”
DIARY DATES
18 - 21 November 2014
27 - 29 January 2015
24 - 25 February 2015
Paris, France
world.cwclng.com
Vienna, Austria
www.europeangas-conference.com
London, UK
www.informamaritimeevents.com
15th World LNG Summit
European Gas Conference 2015
LNG Shipping Conference
26 - 28 January 2015
02 - 04 February 2015
11 - 13 March 2015
Amsterdam, the Netherlands
www.lngbunkeringsummit.com
Houston, Texas, USA
www.worldlngfuels.com
Perth, Australia
www.aogexpo.com.au
LNG Bunkering Summit 2015
8 LNGINDUSTRY
NOV/DEC 2014
World LNG Fuels
Australasian Oil & Gas (AOG 2015)
LNGNEWS
Asia-Pacific
The Netherlands
Korean Register to promote LNG-fuelled ships
Gate secures financing for LNG expansion
K
G
orean Register (KR) will work with the Asia-Pacific
Economic Cooperation Secretariat (APEC) to promote
the use of LNG-fuelled ships in the APEC region.
KR and APEC will collaborate to further the
understanding of the current state and future potential for
LNG-fuelled vessels to serve the region’s maritime trade
requirements.
In 2011, the group confirmed their commitment to “an
action agenda to move APEC towards an energy efficient,
sustainable, low carbon transport future.” LNG-fuelled
shipping is believed to be one of the optimum potential
solutions to help achieve this aim.
“We are proud to be internationally recognised as
a technical consultancy qualified to deliver high quality
research and expertise on LNG-fuelled ships to the APEC
community,” said Kim Chang-wook, Executive Vice
President and acting Chairman and CEO of KR.
“I am confident that this project will raise our collective
knowledge on the potential for LNG-fuelled vessels and
help create a practical environment for the application
of this innovative technology for eco-friendly transport
solutions,” he added.
The project is due for completion by the end of 2015.
ate terminal has signed a financing agreement with the
European Investment Bank (EIB) and four other banks,
to support the funding of the LNG break bulk infrastructure
and services in the Port of Rotterdam.
The investment in this break bulk infrastructure is
expected to boost the use of LNG as a cleaner alternative
transportation fuel in the Netherlands and northwest
Europe.
The new financial agreement adds a total of
€76 million to the existing long-term debt financing
program for the Gate terminal, worth €750 million.
The construction of the new break bulk infrastructure
is scheduled to start later this year.
Gate terminal will be expanded with an additional
harbour basin, financed by the Port of Rotterdam, which
enables LNG distribution for small scale use with a
maximum capacity of 280 berthing slots per year.
“With this funding we can, in a disciplined way, step
by step further develop Gate terminal. This new break
bulk infrastructure will facilitate the usage of LNG as a low
emission fuel all over Europe,” said René Oudejans, CFO
of Gasunie and Jack de Kreij, CFO of Royal Vopak.
Gasnuie and Vopak are the main project stakeholders.
USA
Dominion begins Cove Point LNG construction
D
ominion has started construction activities at the Cove Point LNG export project, located in Maryland, US.
Commenting on the occasion, Diane Leopold, President of Dominion Energy, said: “This is a historic event for
Dominion, Maryland and the nation. The Cove Point LNG export project will help meet the world’s need to move
toward cleaner fuels.
“At the same time, it will provide significant economic benefits in terms of thousands of construction jobs,
hundreds of millions of dollars in new tax revenues over the life of the facility, and an outlet for some of the nation’s
surplus natural gas supplies.”
Construction activities have begun at the LNG terminal with initial preparations for worksite clearing and grading.
Activities were initiated in October at two off-site locations, a temporary pier being built on the Pautuxent River and a
temporary location for offices, material staging and parking for project construction workers.
10 LNGINDUSTRY
NOV/DEC 2014
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ALL A R O U N D
Naoki Shimoda, USA,
and Girish Shirodkar,
Asia Pacific, Strategic
Decisions Group,
provide an overview
of the global LNG
industry.
12 LNGINDUSTRY
NOV/DEC 2014
THE WORLD
T
he ‘age of gas’ is now well and truly upon the global
energy markets. Fracking has sky-rocketed supply of
natural gas from shale and tight formations. Gas has
shifted from being a regional fuel to becoming a focal point of
global energy supply.
Natural gas has historically lagged behind oil as a fuel since
it requires end-to-end investment in pipelines or needs to be
cooled to cryogenic temperatures as LNG, for transportation to
the end customer. The striking growth in LNG trade over the last
five decades is evidence of linkages being forged between the
key regional gas hotspots and demand centres. This has also
been accompanied by increased spot trade and by greater
flexibility in the terms and conditions of long-term gas
contracts.
Supply dynamics
The past couple of years have seen the emergence of a few
mega trends on the supply side.
Shale gas takes centre-stage in the US
Shale gas has transformed the US energy landscape. Reserves
in the US stood at 129.4 trillion ft3 in 2012, up from 34 trillion ft3
in 2008.1 Between 2008 and 2011, US shale gas production
rose by over 55% each year to almost 8 trillion ft3 in 2011, and
its share of total US gas production jumped from 5% to 39%.
The US has become the top producer of oil and gas, which led
to a large drop in Henry Hub (HH)
prices, from US$ 13/million Btu in
2008, to US$ 1.9/million Btu in
April 2012 before recovering to
US$ 4/million Btu levels in
2013 and 2014.2
NOV/DEC 2014
LNGINDUSTRY
13
Russia looks East
Russia has finally agreed to supply China with up to
38 billion m3/year of gas for 30 years through its pipeline
network (see Figure 1). The relatively low price that China
will pay for Russian gas (US$ 350 per 1000 m3, roughly
10% below European prices as per analyst estimates)
is going to put downward pressure on the current
Japan Crude Cocktail (JCC)/HH linked contracts. Experts
believe that pipeline gas from Russia can bring prices down
from US$ 13/million Btu to US$ 10 - 10.5/million Btu.3
Frontier regions
The International Energy Agency (IEA) estimates that
Africa holds approximately 74 trillion m3 of technically
recoverable natural gas reserves, roughly 10% of the
world’s total, with the majority still undiscovered.
A significant portion of the gas lies off the coast of
Mozambique, whose recoverable offshore discoveries total
more than 150 trillion ft3, with more expected. Tanzania has
at least 30 trillion ft3 of recoverable gas offshore.
Mozambique currently plans to bring LNG on stream
before 2018 and Tanzania plans on doing the same before
2020. Development is complicated by the complete
absence of basic infrastructure and logistics, which must
be built from scratch under regulatory frameworks that
have yet to be implemented.
Potential supply glut expected in APAC
by the end of the decade
Many new projects have been announced globally across
Australia, the US, Russia, Canada, Mozambique, etc. This
is expected to cause a supply glut towards the end of the
decade, when supply is expected to surpass demand (see
Figure 2). It is expected that the higher cost projects will
be squeezed out of the market and either postponed or not
reach FID.
LNG liquefaction costs tripled over the
past decade4
LNG liquefaction costs have tripled over the past decade
from US$ 400/tpy to US$ 1200/tpy (see Figure 3).
However, the comparison is not straightforward. Plant
scope, and consequently costs, can vary by a factor
of four, ranging from a simple liquefaction train to a
complete facility including storage, pipelines and export
jetty, together with associated infrastructure (such as
construction camp, township and air strip), before any
regulatory or environmental costs are considered.
Australian projects have suffered large cost increases
due to the remote location, substantial infrastructure
development requirements, limited skilled workforce, tight
social investment regulations and rigorous safety and
environmental requirements.
The strengthening Australian dollar has also
contributed to overall cost. Since 2009, the US/Australian
dollar exchange rate has climbed from US$ 0.69 to
US$ 0.93 in September 2014, a 34.8% increase, which
directly impacts project costs.
As such, floating LNG (FLNG) has emerged as a
cost-effective alternative to land-based liquefaction, with
potentially lower development costs, lower environmental
impact and the ability to monetise smaller gas fields
in-situ. Petronas’ PFLNG 1 will be the first FLNG project
when it is commissioned in 2015.
Shift to Henry Hub
Figure 1. Siberia pipeline and Altai proposed routes in
Russia-China deal. Source: Eurasian Development Bank (bne.eu).
Figure 2. Global LNG demand vs. potential supply
(million tpy). Source: EY Oil & Gas forecast 2013.
14 LNGINDUSTRY
NOV/DEC 2014
HH-linked gas prices are expected to be cheaper than
post-Fukushima oil-linked prices. Given the indicative
price formulae for South Korea as 1.15 x Henry Hub +
US$ 3 (liquefaction) + US$ 3 (transportation), a HH price
of US$ 5/million Btu compares to US$ 68.15/bbl of oil, a
massive discount to current oil prices.5 As Canadian LNG
plants start up, LNG contracts could also be linked to
AECO-C (the Alberta gas benchmark). Buyers are trying to
move away from oil-linked prices6 – Kansai Electric Power
signed a HH indexed agreement with BP for globally
sourced LNG, expecting approximately 30% lower import
costs.
LNG price volatility is expected to increase as LNG
exports may pull up HH prices and capital costs continue
to rise.
Increase in spot and short-term LNG
volumes
Spot sales help consumers meet disruptions in gas
production and smoothen seasonal consumption peaks.
THAT WAS A SAMPLE OF
NOVEMBER / DECEMBER ISSUE
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